Why do Gasoline Prices Fluctuate?

The price of gasoline affects most consumers’ cost of daily living, and also triggers a far reaching economic impact across numerous industries. Not only do gasoline prices have an immediate effect on individuals’ living expenses, they also influence consumers indirectly through logistical costs incorporated into the pricing of other consumer goods, the types of vehicles that are demanded of the automobile industry and the possibly prohibitive cost of travel. The price of gasoline fluctuates because it is influenced largely by dynamic factors such as the price of crude oil due to supply and demand, environmental factors and government regulations.

The largest determinant of gasoline prices in the United States is the going rate per barrel of oil established by Organization of the Petroleum Exporting Countries (OPEC), a conglomerate of twelve oil exporting countries which are major producers and hold a majority of the world’s oil reserves. OPEC members are subject to production limits, which are imposed by the organization to maintain target prices for oil across the world. Oil prices are determined based largely on supply, demand and the types of oil available, but also environmental factors which affect the production and distribution throughout any level of the supply chain. For instance, Hurricane Katrina caused many offshore oil drilling ventures to shut down and also impacted refinery and pipeline operations, causing a dramatic spike in the price of oil and thus gasoline. The cost of crude oil determined by OPEC is based partly on the level of supply and demand, but the mere anticipation of a shortage is enough for consumers to see a jump in prices.

Governmental requirements also affect the price that consumers pay at the pump. Environmental standards requiring cleaner burning fuel in areas such as California, Milwaukee and Chicago generate demand for a specialized product that is produced in limited supply, contributing to the higher gasoline prices in such areas. Geographical differences in gasoline prices across the country are also attributed to varying state and local tax requirements, unexpected disruptions, the level of competition among providers and logistical cost differences such as the distance that a product must be transported to reach the location.

The ultimate price that consumers pay for gasoline is a summation of the accumulated costs associated with producing and delivering the final product to the consumer. The going rate of crude oil accounts for a majority of the price consumers pay for gasoline. The final price that consumers pay for gasoline at the pump also reflects the cost of refining, taxes, distribution and marketing costs as well as individual gas station markup.

About the Author: Greg Chapman, of Greg Chapman Motors, is a leading used car dealer Austin has depended on since 1959. For more information please visit Greg Chapman Motors.

Tips for Hassle Free Car Rental

Summer is the season for travel, and for many people that means booking flights, rental cars and hotels in far off places. Planning ahead and asking the right questions can help you avoid transportation headaches when you should be enjoying your much needed vacation. These tips for car rental can help make your vacation travel more affordable and devoid of unnecessary hassles.

-Make reservations early. Like airline tickets, the price of car rentals can increase as travel dates grow near and vehicle availability decreases. Especially during peak travel season, such as summertime, reserving a rental vehicle in advance can save you money and give you peace of mind that the vehicle will be available when you need it. Also, ask about the company’s cancellation policy at the time you make your reservation so that you will not be surprised later by owing undisclosed fees.

-Compare rates online. Shopping around for the best price and availability of the vehicle you prefer is the best way to get what you want. To avoid wasting too much time calling around, seek reputable websites that do the work for you. Good comparison sites allow you to see the rates and other details about different companies, and can save you both time and money. Make sure to take advantage of any online discounts that are offered.

-Seek a company that can accommodate your schedule. Make sure to find out the hours of operation for the rental company you are dealing with. Many are not open 24 hours, and you will probably need to be able to pick up and return the rental vehicle during a designated time frame. If you are flying and renting a car at your destination, check your arrival and departure times to ensure that the rental company will be open at the time of day that makes sense for your travel plans.

-Cover your bases. Upon picking up your vehicle, perform a thorough inspection with the rental agent, and make note on the contract of any existing damage. This precautionary measure will alleviate you from responsibility for damage to the vehicle that you did not cause.

-Comply with mileage restrictions. It is in your best interest to read the fine print of your contract to avoid surprises upon returning the vehicle. For instance, many contracts contain restrictions on the number of miles permitted with your contract as well as stipulations like a requirement to stay within the state. Failure to comply with your contract can result in extraneous charges or can negate the insurance coverage should something happen to the vehicle.

About the Author: Greg Chapman, of Greg Chapman Motors, is a leading used car dealer Austin has depended on since 1959. For more information please visit Greg Chapman Motors.

Being a Courteous Driver

Driving automobiles has evolved into a lifestyle choice that many people feel is necessary to carry out their daily endeavors. With an abundance of vehicles congesting the roadways in many cities, drivers are increasingly forced to deal with the shortcomings and unpredictability of fellow drivers. Communication between drivers is necessary in the case of using turn signals to indicate intent to turn, but increasing numbers of incidents involving road rage and violence suggest that many drivers direct negative emotions toward other drivers rather than focusing on being considerate drivers themselves. Unfortunately, such emotional involvement while driving can lead to accidents, citations or road rage violence. Being a courteous driver is more than just a respectful habit toward others, it can help protect you from serious injury or worse. Being a courteous driver involves focusing on your responsibility as a driver while taking into consideration the way that your driving habits can affect other drivers on the road.

A crucial part of being a courteous driver is focusing on safe driving and staying alert to the road and traffic conditions all around you. Being inattentive can lead to careless mistakes that put you and other drivers at risk. Acknowledging and obeying the speed limit is one simple way you can respect other drivers and contribute to safer roads for everyone.

Along with concentrating on safe driving, a courteous driver should consider how his or her actions affect other drivers. For instance, tailgating the vehicle in front of you can cause the driver of the vehicle to become nervous, anxious or angry, all of which can negatively impact their driving. In the case that the driver in front of you comes to an abrupt stop, tailgating is putting yourself and others in a close call situation, even if you react quickly enough to bring your vehicle to a halt. You can never be certain that the driver behind you can successfully come to a sudden stop as well. Practicing patience and avoiding driving unnecessarily close to other vehicles not only makes for a more pleasant driving experience for everyone, it can save the lives of parties involved.

The simple action of using a turn signal to warn other drivers of your intentions is not just a courteous gesture, it is required by law. Signaling that you will be turning or changing lanes gives other drivers notice that you may need to slow down or stop, so that they may be prepared to react accordingly. Making abrupt maneuvers without warning puts you and other drivers at risk of an accident. Courteous driving involves using turn signals as well as obeying other traffic laws, such as completely stopping at red lights and stop signs.

Being a safe, courteous driver means staying alert, obeying traffic laws, keeping emotions under control and practicing driving habits that take other drivers into consideration.

About the Author: Greg Chapman, of Greg Chapman Motors, is a leading used car dealer Austin has depended on since 1959. For more information please visit Greg Chapman Motors.

Where Does Gasoline Come From?

Drivers know the basic procedure for keeping their vehicles running: fill up with gasoline, drive, repeat. Most drivers know this routine so well that it is second nature, without stopping to wonder where the gasoline that seems so essential to their lifestyles originates. You have probably heard the buzz about the need to conserve petroleum based products due to their limited availability for future generations. This is because petroleum based products such as oil and natural gas are nonrenewable resources that take millions of years to produce naturally, and known reserves fall considerably short of anticipated future demand. The gasoline that powers most vehicles has its origin in ancient marine life that died millions of years ago, but how so?

Oil and natural gas, generically classified together as petroleum products, are found deep within the earth in many parts of the world. What surprises many people is that oil is actually formed from the remains of small organisms, such as algae, plankton and vegetation which lived tens or hundreds of millions of years ago in oceans and lakes. When such organisms passed away, their remains settled on the bottoms of the oceans or lakes, and were covered by mud and sediment. The presence of oxygen with time helps organisms decay, but the small percentage of these organisms that would go on to form oil became compressed into oxygen deprived mud and rock. Over thousands of years, the pressure and heat exerted on the original layer became increasingly intense, eventually converting the organic matter into deposits of petroleum.

Such petroleum deposits are extracted by humans to be processed for use across many industries. One substantial use for such natural oil is the production of gasoline for automobiles with internal-combustion engines. But the oil extracted from underground, called crude oil, must be refined through the process of fractional distillation before it is ready to power an engine. Fractional distillation involves heating oil in a controlled environment in order to separate different kinds of hydrocarbons as their characteristic boiling points are reached. Through this process, chemists obtain the substance we know as gasoline.

Internal combustion engines, those utilized to power most vehicles, get mechanical energy through the burning of chemical energy in a combustion chamber. Such fuel combustion activates a piston contained within a cylinder, turning a crankshaft that turns the wheels of the car using a chain or drive shaft.

Today, measures are being taken to reduce consumer reliance on natural oil due to limited supply as well as widely held environmental concerns.

About the Author: Greg Chapman, of Greg Chapman Motors, is a leading used car dealer Austin has depended on since 1959. For more information please visit Greg Chapman Motors.

Preparing your Vehicle for Sell or Trade

Whether you are selling your vehicle privately or trading it in at a dealership, the goal is to maximize the monetary value that you receive in return. Below we address some tips that will help you get the best resale or trade-in value for your vehicle.

-Make sure the vehicle is immaculate inside and out. First impressions happen in a matter of seconds and cannot be taken back. Whether you detail the car yourself or have it done professionally, cleaning is an extremely important step that should not be underestimated. Not only does cleanliness emphasize the best features of the vehicle, it portrays that the vehicle has been taken care of in other ways as well.

-Repair noticeable damage, even cosmetic. Seemingly insignificant problems such as broken console parts, minor body dents, broken headlights or missing hubcaps affect the overall impression that a buyer will get about the condition of your vehicle. Dents can often be repaired for minimal cost and without requiring that the entire vehicle be repainted. Again, eliminating such problems gives the impression that the vehicle has been cared for and maintained in other areas.

If your vehicle has damage that you do not plan to repair, obtain an estimate for the cost of repairing the damage, and use the estimate in negotiation. Acknowledging any problems and being proactive with a buyer will help build your credibility from the buyer’s perspective.

-Inspect and replace tires if needed. Tires should appear fairly new and have a considerable amount of tread. Dealers often deduct from the trade-in value they would otherwise offer because tires are not in good condition. Likewise, car buyers are not as receptive to a purchasing a vehicle that immediately needs tire replacements.

-Be ready to provide maintenance records. The ability to present accurate and organized service records for the vehicle will bestow confidence in the buyer about the vehicle’s history. If you have not been diligent about maintaining a service log yourself, check with your regular mechanic or dealership which has worked on your vehicle about obtaining a printed version of your vehicle’s maintenance history.

-Be smart during the transaction. Make sure to include a provision in the bill of sale stating that the vehicle is being sold “as is,” that is, without a warranty. Request payment in the form of a money order or cashier’s check, eliminating the chance of being scammed or facing issues associated with accepting a high value personal check.

Finally, be honest about the history of your vehicle, including any needed repairs or problems that the new owner will have to address.

About the Author: Greg Chapman, of Greg Chapman Motors, is a leading used car dealer Austin has depended on since 1959. For more information please visit Greg Chapman Motors.

First Time Car Loans

Over the top advertising promises meshed with financial jargon leave many people feeling overwhelmed when financing a used car for the first time. Simply knowing what information to look for and locating a used car dealership that works with you to reach your goals can demystify the process and help you make the best decision for your situation.

Before journeying to visit a dealership, make sure you know where your credit stands and the exact maximum monthly payment you can afford. The higher your FICO score is, the better your chances are of being approved for and obtaining a good interest rate on a loan. Although credit standing is an important factor when financing a vehicle, some specialized used car dealerships offer loans for those consumers with less than perfect or even bad credit. Taking an honest look at your financial situation to determine the monthly payment you can manage is another very important step to take before visiting a dealership. Determine the maximum monthly payment that works for your budget, and never exceed that amount when securing your loan.

Find a reputable used car dealer who is honest and makes you comfortable, as communication with the dealership is likely not just a one time affair. Do not hesitate to ask questions about the financing options of dealerships with which you visit. Whether a dealership offers true in house financing or loans are outsourced to a bank is one important piece of information to determine. If loans are financed through a third party entity such as a bank or credit union, multiple inquiries are likely to be made on your credit, which will be harmful to your credit score. In this case, it is best to obtain an in house loan from the dealership. Make sure that the dealership regularly reports to at least one of the credit bureaus, which will help you further improve your score by making timely payments on your loan.

While getting the best loan possible is a major concern when financing a used vehicle, you must also check out the background of any vehicle before purchasing. A good way to check a vehicle for a history of wrecks, flooding or odometer tampering is to obtain a report from a reputable company such as CARFAX. A good used car dealer will not only provide in house financing and report to a credit bureau, but will take the extra step of providing you with a CARFAX report at extra cost to you.

About the Author: Greg Chapman, of Greg Chapman Motors, is a leading used car dealer Austin has depended on since 1959. For more information please visit Greg Chapman Motors.

Supreme Court Decision may Impact Automobile Industry

On April 2, 2007, the Supreme Court made a 5-4 landmark ruling in Massachusetts v. EPA that may have long term implications for the automobile industry. The court ruled that the Environmental Protection Agency (EPA) has the authority to and should consider actions to establish emissions regulations for new automobiles under the provisions of the Clean Air Act.

Massachusetts, along with other states, local governments and organizations sued the EPA on the grounds that by refusing to regulate the automobile industry for greenhouse gas emissions, the EPA was not fulfilling its obligations under the Clean Air Act, a case which Massachusetts and the others had lost in the lower courts. The Clean Air Act is a federal law regulating air emissions from multiple sources and giving the Environmental Protection Agency the authority to enact National Ambient Air Quality Standards (NAAQS) for the sake of public health as well as the environment. When Massachusetts v. EPA reached the Supreme Court, in question was whether the Clean Air Act gave the EPA the power to regulate new vehicle emissions, and if so, whether the reasons given by the Environmental Protection Agency for neglecting to do so were in accordance with the Clean Air Act.

The EPA’s main argument was that it did not interpret the language of the Clean Air Act as giving the EPA authority to establish regulations for new car emissions, adding that even if it had the authority, the agency did not believe that regulating emissions in the automobile industry would be a sensible decision. The EPA reasoned that a definite causal relationship between greenhouse gas emissions and global warming had not been established, among other reasons for believing that regulating car emissions would be unwise.

The court ruled in a 5-4 decision that the EPA did in fact have the authority to regulate such matters, asserting that greenhouse gases fall well into the definition of “air pollutant” as it is defined within the text of the Clean Air Act. Further, the court ruled that the EPA had cited policy conflicts as justification for its claim that it would not be a wise decision to regulate the automobile industry, while reasons for the claim should have relied on scientific findings.

The court did not oblige the EPA to take actions regulating the industry, rather it determined that the EPA does in fact have the authority to do so, and must provide reasons for not regulating which are in accordance with the Clean Air Act.

About the Author: Greg Chapman, of Greg Chapman Motors, is a leading used car dealer Austin has depended on since 1959. For more information please visit Greg Chapman Motors.

What is the Speed Limit?

Drivers are aware of the consequences associated with exceeding the legal speed limit, such as the likelihood of an accident, danger of personal injury and the financial burden of getting that dreaded traffic citation. Until 1973, speed limits were imposed independently by each state, with no federal intervention. Nationally enforced speed limits originated in 1973 in response to an oil embargo against the U.S. which caused an oil shortage and resulted in a sharp rise in oil prices. Ensuring compliance by threatening to withhold federal funding from non complying states, Congress instituted a nationwide 55 mile per hour maximum speed limit.

Despite the speed limit’s original intention of reducing fuel consumption, government officials and the general public alike became conscious of its implications beyond fuel usage. The findings of numerous studies began to reveal the inherent safety implications of the imposed speed limit, most notably that the risk of death or serious injury in a car accident increased with speed.

Implementation of the national speed limit, however, was not met without resistance from affected American drivers. Common arguments declared that undue restrictions were being placed on citizens’ individual rights, and that the new law arbitrarily designated many Americans as law breaking citizens. Additionally, drivers argued that many highways had been designed to accommodate speeds greater than 55 miles per hour. As a result, in 1987 Congress passed an amendment to the law that allowed states to raise rural interstate speed limits to 65 miles per hour. It was not until 1995, with approval from President Bill Clinton, that legislation returned the authority of determining speed limits to the states and eradicated the national speed limit.

Though there is still a need to preserve oil as a natural resource, today’s speed limits are imposed with motorist safety being of utmost concern. Some dynamics which are considered in determining the speed limit for a given stretch of road are road conditions such as hills and surface curvature, access sites such as intersections and onramps, traffic volume, visibility distance, history of accidents and the findings from extensive field testing.

The fact that maintaining speeds at or below posted speed limits reduces the chance of death or injury in an accident bears repeating. Drivers should also consider factors besides the speed limit when determining a safe speed at which to drive, such as the external environment and traffic conditions. The presence of rain, snow and ice pose significant hazards to drivers and warrant a much lower speed than dry roads for adequate vehicle control. Likewise, extremely dense traffic typically requires slower speeds for one’s own safety and that of other motorists.

About the Author: Greg Chapman, of Greg Chapman Motors, is a leading used car dealer Austin has depended on since 1959. For more information please visit Greg Chapman Motors.